Social Franchises: the Bridge Between Private Healthcare Providers and National Health Insurance Programs Lessons Learned from Two Initiatives in the Philippines

Social franchises: The bridge between private healthcare providers and national health insurance programs Lessons learned from two initiatives in the Philippines

Social Franchising for Health innovate » demonstrate » replicate Social franchises: The bridge between private healthcare providers and national health insurance programs Lessons learned from two initiatives in the Philippines

Social Franchising for Health innovate » demonstrate » replicate

The Global Health Group Global Health Sciences University of California, San Francisco 550 16th Street, 3rd Floor San Francisco, CA 94158 USA Email: [email protected] Website: globalhealthsciences.ucsf.edu/global-health-group

Ordering information This publication is available for electronic download at sf4health.org/research-evidence/reports-and-case-studies.

Recommended citation Viswanathan, R., Avanceña, ALV. (2015). Social franchises: the bridge between healthcare providers and national health insurance programs | Lessons learned from two initiatives in the Philippines. San Francisco: Global Health Group, Global Health Sciences, University of California, San Francisco.

Photos courtesy of Anton L. V. Avanceña

Produced in the United States of America.

First Edition, February 2015

This is an open-access document distributed under the terms of the Creative Commons Attribution-Noncommercial License, which permits any noncommercial use, distribution, and reproduction in any medium, provided the original authors and source are credited. Contents

Key terms and concepts | 1 Social franchising of health services and commodities | 1 Social health insurance | 1

Acronyms | 2

Background | 3 Significance of the case study | 4

Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas | 9 Well-Family Midwife Clinics | 9 BlueStar Pilipinas | 10

Findings | 13 Strategies used to build and support links with the NHIP | 13 Understanding the value proposition: To the franchisee and the franchisor | 16

Lessons learned | 19

Conclusion | 23

References | 24

Appendix: PhilHealth accreditation | 26

Initial accreditation or reaccreditation | 26 Renewal of accreditation | 26 Service capabilities | 27 Technical standards | 27 Key terms and concepts

Social franchising of health services and In this model, a third party ‘franchisor’ catalyzes the commodities growth of a network of franchisees by offering members a range of financial and social incentives to join. These Commercial franchising has been used effectively to sell incentives may include the creation of a brand identity, standardized and predictable commodities and services mass marketing campaigns for that brand or on behalf at a large scale. Clinical social franchising applies select of members, access to medical commodities at cost or commercial franchising principles to create networks of below market rates, and technical and business man- private healthcare providers and vendors that are similar- agement trainings. In return, a member agrees to comply ly accountable for the provision of quality-checked and with standards set by the franchise program, to report on standardized clinical and non-clinical health services and performance across certain parameters, and to pay fees commodities that are important for population health. to maintain membership.

This approach may be used to standardize the quality and range of health services offered by the private health Social health insurance sector, to increase the number of points of service-delivery Social health insurance pools high- and low-risk people for a particular set of health services, or otherwise address and allows enrollees to contribute based on their ability to issues that are challenging to meet by the public health pay.1 Social health insurance is characterized by compul- system alone. sory membership, a set of eligibility requirements that is usually based on timely premium payments, and a social The graphic below offers a conceptual snapshot of how a compact between enrollees and the insurance program.1 social franchise program is typically organized. Social health insurance programs around the world have been associated with lower out-of-pocket payments and lower financial burden on consumers of health services.2, 3

The Clinical Social Franchise Model

√ training √ √

Private sector healthcare The Franchisor (an independent As Franchisees, private sector providers may offer a range agency or program) recruits private healthcare providers now offer of health services, with little sector health providers, and offers franchised health services and or no quality oversight from them: commodities that are linked to an independent body. • a shared brand identity, and protocols and standards. marketing support • access to subsidized branded health commodities • trainings in better clinical and business management practices • stipulated standards in relation to the franchised commodities and services, and quality oversight

Key terms and concepts | 1 Acronyms

BSP BlueStar Pilipinas OOP Out-of-pocket payment DALY Disability-adjusted life year PHP Philippine peso DOH Philippine Department of Health PSPI Population Services Pilipinas, Incorporated FTM Field team member RSH Reproductive and sexual health FP Family planning SHI Social health insurance HIV/AIDS Human immunodeficiency virus/acquired SMS Short messaging system immunodeficiency syndrome STI Sexually transmitted infection IUD Intrauterine device TANGO Technical Assistance for the Conduct of JSI John Snow, Inc. Integrated Family Planning and Maternal Health Activities by Philippine MNCH Maternal, newborn, and child health Nongovernmental Organizations MCP Maternity Care Package TB-DOTS Tuberculosis directly observed therapy, MDG Millennium Development Goals short course MMR Maternal mortality ratio UCSF University of California, San Francisco MSI Marie Stopes International USAID United States Agency for International Development NCP Newborn Care Package USD US dollar NDHS National demographic and health survey WFMC Well-Family Midwife Clinic NGO Nongovernmental organization NHIP National Health Insurance Program

Acronyms | 2 Background

The private health sector—which includes non-governmental and faith-based organizations, for-profit com- panies, and formal and informal private providers—is a The two franchise programs that participated in major source of healthcare in low- and middle-income this case study—Well-Family Midwife Clinics 4–7 countries. Improving population health without including and BlueStar Pilipinas—are also the subjects of the private health sector in a system-wide response has other case studies. become an untenable option in many countries. However, major challenges in engaging the private health sector • Beyeler, N., Briegleb, C., Sieverding, M. persist. Many private health sector providers operate (2014). Financial sustainability in social outside of networks, and are not subject to oversight or franchising: promising approaches and regulation once they are initially certified and licensed. emerging questions. San Francisco: Global Quality of care is also highly variable. Health Group, Global Health Sciences, University of California, San Francisco. In the 1990s, the first few clinical social franchising programs were created in south and southeast Asia. These • SHOPS Project. (2014). Private Midwife programs, led by franshisor agencies, brought thousands Provision of IUDs: Lessons from the of health professionals into the newly created franchise Philippines. Brief. Bethesda, MD: Strength- networks, with a specific focus on improving the quality ening Health Outcomes through the Private and range of family planning (FP) services offered. There are Sector Project, Abt Associates Inc. now over 80 programs operating in 43 countries, and their • Population Services Pilipinas, Inc. (2013). missions and operating models vary significantly. However, BlueStar Brief—A Spotlight on BlueStar they tend to offer similar sets of ‘value propositions’ Pilipinas: BlueStar Pilipinas connects with to health professionals to participate in their networks, National Health Insurance, PhilHealth. Marie including (1) the potential for greater client volume, (2) the Stopes International. potential for greater revenue, (3) access to networking and • Pernito, V.L., et al. (2010). Clinical Social knowledge-exchange opportunities with other health Franchising Case Study Series: BlueStar professionals, (4) access to commodities and equipment Pilipinas, Marie Stopes International. The at below-market rates, and (5) the potential to deliver Global Health Group, University of California, better quality healthcare. San Francisco. This case study focuses on programs in the Philippines, • Well-Family Midwife Clinic and John Snow, a country that has been home to social franchising Inc. (2004). TANGO II Final Report Project programs for nearly 20 years. Two programs, Well-Family Summary. USAID. Midwife Clinics (WFMC) and BlueStar Pilipinas (BSP), have • Jones, B.J. and Moore, R.V. (2003). Social built networks of private midwives that provide FP and Franchising Health Services: A Philippines maternal, newborn, and child health (MNCH) services. Case Study and Review of Experience. These programs have stimulated and leveraged USAID. developments in national health insurace policies in the Philippines in order to ensure their networks and clients could benefit from them.

This case study documents the approaches that WFMC and BSP undertook to link their networks to the National Health Insurance Program (NHIP). We also investigate if and how the franchisor agencies were able to benefit from the linkages, and if this has implications for their sustainability plans.

Background | 3 Significance of the case study Trade-offs may however become less necessary where financing for the provision of franchised health services Social franchise programs strive to achieve multiple goals is available from social health insurance programs. Social that may be at odds with each other: health insurance is posited to reduce cost burden on clients,2, 3 raise the quality of care through associated • Public health goals: equity, quality, expansion of the accreditation and claims reimbursement requirements,8 market to new users, cost-effectiveness, and health and may contribute to greater revenue for franchisees.9 impact Franchise programs that can promise support for accredi- • Business goals: financial sustainability of the tation and claims processing to private midwives may also franchisees and franchisor be able to use this service as an important hook to recruit or retain members within a franchise network. A program that strives to meet the health needs of the poorest in the most geographically isolated regions may The two franchise programs that participated in this suffer in terms of its ability to generate revenue for the study—WFMC and BSP—have offered substantial support franchisor or franchisee, or may appear less cost-effective. to midwives to enable them to become eligible for participation in the NHIP, and to draw revenue from it on an Benefits of linking a franchise program to a social health ongoing basis. insurance program There is, however, little evidence to show that franchisors Franchisor Franchisee/ Client have been able to leverage this costly form of support, or clinic social health insurance financing generally, toward improving prospects for financial sustainability of the franchise May serve as May increase May reduce program itself. This report can therefore provide important a recruitment client-load out-of-pocket input for programs, donors and social investors that are incentive for spending seeking to learn from the Philippines experience. franchisees May increase revenue May increase May support access to achievement of government public health subsidized goals such as health services equity, improvement of health services, and health improvement at a population-level

Background | 4 Methods

Sample programs; and semi-structured interviews with franchisees in two regions, key informants, and topical experts. Twenty-nine semi-structured interviews were conducted among 16 franchisees, seven franchise program Interviews were conducted in-person, lasted approxi- administrators, three representatives of the NHIP and the mately 42 minutes (range 21–84 minutes), on average, Philippine Department of Health (DOH), and three topic and were held in the offices of the respondents. Eleven experts that were unaffiliated with the social franchise interviews were conducted by the researchers in English, programs or the NHIP and DOH. ten in Tagalog, and eight in a mixture of both languages and Hiligaynon. The English and Tagalog interviews were conducted by the researchers; the Hiligaynon interviews Sampling methods were conducted by a paid interpreter. Interview respondents included key informants, the management and administrative personnel of the two Post-interview clarifications were sought via email franchise programs, and accredited franchisees operating correspondence. Key findings from the interviews were in the National Capital Region and Western Visayas. also confirmed using official documents or forms, studies, Key informants were selected because they had expert and reports published on the internet for public use or knowledge regarding the social health insurance program, provided by respondents. or the two social franchise programs being studied.

Franchisees were selected and referred to the researchers Ethical considerations by the managers of the social franchise programs. Only Ethical approval was obtained from the UCSF Committee franchisees that are accredited by the national health on Human Research and the University of the Philippines, insurance program were included. Manila Review Ethics Board. Letters of approval were obtained from the administrators of both social franchise programs. Data collection Data was gathered from a review of peer-reviewed litera- All respondents were informed of their right to refuse par- ture; published and unpublished case studies; e-mail cor- ticipation in the study, and only respondents that agreed respondence with the managers of the WFMC and BSP to sign the consent forms were included in the study.

Methods | 5 Context: Health and spending in the Philippines

The Philippines is a lower middle-income country located According to a 2009 survey by the Philippines DOH, the in Southeast Asia. It has a population of over 96 million, leading causes of maternal mortality are complications with an annual population growth rate of 1.7%. In the last during labor, delivery, and the puerperal period, hyperten- few years, the Philippines reported high economic growth sion during early pregnancy and childbirth, and postpar- rates. In 2013, the gross domestic product (GDP) growth tum hemorrhage.17 rate was at 7.2%.10 Poverty, however, continues to affect Filipinos in both urban and rural areas. In 2012, over a The under-five mortality rate, which is defined as the quarter of the population, or 19.7% of all Filipino families probability of dying between birth and five years of age, lived in poverty with an estimated monthly income of less is estimated at 31 deaths per 1,000 live births.16 If the than 7,980 PHP (179 USD) for a family of five.11 Over 9.8 annual rate of decline continues in 2015, the Philippines million of all Filipinos are living in extreme poverty. is expected to meet the MDG 4 target of 20 deaths per 1,000 births.18 Close to 50% of all under-five child mortal- Select population and economic development ity is due to neonatal deaths or deaths within the first 28 statistics, 2012 days of life.19

Population 96,710,000 Select health statistics

Annual population growth rate (%) 1.7 Maternal mortality rate 221 2011 Adult literacy rate (%) 95.4 (per 100,000 births) Percent urban population (%) 52.5 Under five mortality rate 31 2013 (per 1,000 live births) Percent of population living in poverty (%) 25.2 Infant mortality rate 23 2013 Percent of families living in poverty (%) 19.7 (per 1,000 live births) Gross domestic product per capita 2,587 Proportion of births attended by skilled 74.9 2011 (current USD) health personnel (%) Gross national income per capita, PPP 2,500 Proportion of pregnant women who 84.3 2013 (current USD) receive at least four antenatal care visits (%) Life expectancy at birth (years) 69 Unmet need for family planning (%) 19.3 2011 Source: The World Bank. 2014. World Development Indicators. Available from www.data.worldbank.org. Contraceptive prevalence rate (%) 55.1 2013 Adolescent birth rate (per 1,000 37.7 2013 women ages 15 to 19) Health status While the Philippines has witnessed significant improve- Source: Philippine Statistics Authority - National Statistical Coordination Board. 2014. The Philippines Millennium Development Goals. Available from www.nscb. ments in public health, several challenges remain. There is gov.ph. an inequitable distribution of healthcare facilities throughout the country, and many of them are poorly equipped.12, 13 There is also a shortage of healthcare providers such as One of the barriers to reducing maternal mortality is the 12 doctors, dentists, and occupational therapists. Both low use of skilled attendants and facility-based delivery the public and private sectors provide health services of services among poorer women.20, 21 Studies have shown variable quality, and many private facilities charge high that wealthier women are more than 15 times as likely as out-of-pocket (OOP) payments, which may lead to impov- poor women to give birth in a health facility or be attended 14, 15 erishment, particularly among the poor. by a skilled professional when giving birth.22 The preliminary results of the 2013 Philippine national demographic While the country’s maternal death rates have decreased and health survey (NDHS) do however indicate progress— since the 1990s, the Philippines is not expected to meet the percent of births taking place at health facilities has in- its targets for Millennium Development Goal (MDG) 5. creased by approximately 16% between 2008 and 2013.23

Context: Health and spending in the Philippines | 6 Preliminary results from the 2013 NDHS also suggest that Distribution of health expenditure by source, 2011 antenatal care has improved in the Philippines. Over 80% of women receive the recommended four antenatal care 1% visits before birth. In 2008, midwives provided 50% of all 10% antenatal care—a share larger than that of doctors and nurses combined.19 27%

The private healthcare sector The healthcare system in the Philippines is characterized by a diverse private sector and a decentralized public sector that is used mostly by the poor in both urban and 9% rural areas.24 53%

Private sector providers, which include doctors, nurses, midwives, dentists, pharmacists, and occupational and physical therapists, outnumber public providers. The Philippines government acknowledges that the private National and local governments sector is a key player in the national health system, and Social health insurance (PhilHealth) they have engaged with private providers in delivering a Private OOP number of public health services such as tuberculosis di- Other private sources rectly observed therapy, short course (TB-DOTS), FP, and Grants MNCH services.12 The private sector is also represented in a number of interagency committees and technical Source: Philippine Statistics Authority - National Statistical Coordination Board. advisory groups at the DOH. 2013. Philippine National Health Accounts. Available from www.nscb.gov.ph.

Healthcare expenditures and financing National health insurance program In the Philippines, the NHIP is managed by the Philippine In 2011, 4.4% of gross GDP—or 431 billion PHP (9.69 Health Insurance Corporation, or PhilHealth. Aside from billion USD)—was spent on health.25 Public spending on premium payments and employer-employee contributions, health is also increasing, primarily due to the expansion of PhilHealth receives funds from general taxes such as the the national health insurance program of the Philippines, excise tax on cigarettes and alcohol products.26 popularly referred to as PhilHealth. There are several types of PhilHealth coverage that National health expenditures, 2011 Filipinos can avail. Private and government employers are required to enroll all of their employees into PhilHealth; Per capita health expenditures 4,577 (103 USD) self-employed and unemployed persons are encour- (in current PHP) aged to sign up. Free membership is offered to indigent persons, dependents of PhilHealth members (such as Per capita health expenditure growth 11.3 children and spouses), and other populations (such as rate overseas Filipino workers); however, studies have shown Health expenditure as % of GDP 4.4 that PhilHealth faces some challenges in reaching the poorest in the country.27 Health expenditure as % of GNI 3.3 The Philippines government claims that 81 to 85% of Source: Philippine Statistics Authority - National Statistical Coordination Board. 2013. Philippine National Health Accounts. Available from www.nscb.gov.ph. Filipinos are covered by PhilHealth as of 2013, although independent studies show that coverage rates may be around 52%.27, 28 In June 2013, the president of the Phil- In 2011, close to two thirds of health expenditures came ippines signed a law (Republic Act 10606) that mandated from private sources. The single largest source of health PhilHealth enrollment for all Filipinos, including workers in spending in the Philippines is private OOPs (53% or 227 the informal sector.29 The implementing rules and regula- billion PHP). In 2011, 9% of health spending or 39 billion tions of this law, however, have not been approved. This is PHP came from the NHIP. considered a move from social health insurance towards universal healthcare coverage in the Philippines, which is one of the goals of the current national government.30–33

Context: Health and spending in the Philippines | 7 Maternity and newborn care packages Maternity care package40 Since 2003, PhilHealth has bundled essential healthcare • Four prenatal visits (includes essential drugs, laboratory services into case-based packages.34 These packages tests and ancillary services, tetanus immunization, and were developed in order to help the Philippines reach its professional fee for consultation) MDG goals through increased access to and use of select • Professional fee (includes delivery, postpartum care, healthcare services. MDG packages also represent and counseling for reproductive health, breastfeeding, PhilHealth’s shift from a pay-for-service system to a case and newborn screening) rate system where providers are paid a predetermined, • Room and board risk-adjusted amount for a set of healthcare services needed to treat a specific disease or condition.15, 35, 36 • Drugs and medicines Providers are not allowed to charge clients for additional • Laboratory supplies and other ancillary services costs associated with provision of the bundled services.31 • Use of labor, delivery, and recovery rooms The social franchise programs are currently making use of • Other medically necessary charges for delivery and two MDG packages: the Maternity Care Package (MCP) postpartum care and the Newborn Care Package (NCP). The MCP provides reimbursements for normal spontaneous births delivered Newborn care package39, 41, 42 in non-hospital facilities. A franchisee that provides all • Resuscitation for newborns with abnormal breathing the prescribed maternal care services, including all four (e.g., suctioning, administration of oxygen)41 prenatal visits, will receive 8000 PHP (180 USD) per pa- • Newborn screening tests recommended by the DOH tient.37 The NCP reimburses for the provision of essential (e.g., metabolic conditions, hearing) newborn care and newborn screening services. Franchi- sees can receive as much as 1750 PHP (41 USD) for the • First dose of Hepatitis B vaccine 38, 39 provision of the full package. • BCG vaccination • Umbilical cord care • Eye prophylaxis • Administration of Vitamin K • Thermal care

Context: Health and spending in the Philippines | 8 Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas

Well-Family Midwife Clinics facilitating access to credit, providing low cost supplies, and disseminating information to the WFMC network on WFMC is a clinical social franchise program that includes various matters of interest. WPFI is also responsible for 132 WFMC franchisees in 20 provinces throughout the ensuring the financial viability of the franchise program Philippines. All franchisees are private sector midwives, through recruitment and expansion, and finding new and all are authorized, under the WFMC brand, to provide sources of revenue. at minimum the following services: There are 11 non-governmental organizations (NGOs) that • Family planning: family planning counseling, are then directly responsible for a number of operational contraceptives, and referrals for sterilizations and technical support activities for franchisees located in • Women’s reproductive health services: Pap smear, their catchment areas. They are termed ‘local area franchi- pelvic and breast examination, and pregnancy testing sors.’ They are in charge of recruiting midwives, expand- • Maternal and child health care: ANC and well-baby ing their local networks, selecting clinic locations, over- check-ups, including immunizations, vitamin supple- seeing quality, and monitoring franchisees for adherence mentation, nutrition and breastfeeding counseling, to program standards. The NGOs are expected to im- disease screening, and de-worming plement WFMC policies, practices and procedures. They may also offer additional support to franchisees, including • Other services: blood pressure screening, ear piercing, access to credit, support for accreditation and licensure wound care, and sale of over-the-counter drugs, family under the national health insurance program and Depart- planning commodities, and other supplies ment of Health respectively, and networking opportunities.

Organizational structure The NGOs have field coordinators that visit the franchisees regularly—particularly around the first few months of The program has a three-tiered organizational structure. a clinic’s opening—and offer assistance in relation to clin- The Well-Family Midwife Clinic Partnership Foundation, ical practices, business management, and marketing. The Inc. (WPFI) oversees the entire project, and is responsible NGOs also secure the timely collection and submission of for network-wide support activities, including monitoring data from the franchisees to WPFI regarding the services and maintaining service quality, marketing and advertising, that were provided and other key metrics.

WFMC Organizational Structure43

WFMC Partnerships Foundation, Inc.

Partner NGO Partner NGO

Field Coordinators Field Coordinators

WFMC Franchisees WFMC Franchisees

Clients and community Clients and community

Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas | 9 Minimum requirements for franchisees Timeline: 1993 to present Midwives must possess a set of minimum qualifications, Between 1993 and 1995, the United States Agency for assets or access to assets, and entrepreneurial interest, in International Development (USAID) provided funds to order to be considered for inclusion in the network. These John Snow, Inc (JSI) to transform two NGOs into franchi- qualifications are intended to maximize the profitability sors that would convert existing midwife networks into of the franchisee’s business enterprise, and minimize the franchise networks specializing in the provision of family need for the franchisor to intervene financially. planning services. While these efforts failed due to poor planning and training of the private providers, USAID continued to work with JSI through a series of new Midwife selection Site selection projects under the name TANGO (1995–2004). criteria considerations Possession of a midwifery Population density in the Under TANGO, the WFMC brand and a restructured social license catchment area franchising model were developed. Maternity, infanty and child health services were aded to the menu to generate Interest in owning and Disposable household additional revenue for the franchisees. Several additional running a business income NGOs were brought on board, and each was designated Has funds to rent or buy a Access to various means to oversee franchisee networks in their respective local- clinic and to make needed of transportation ities. JSI remained as the national franchisor until 2002, renovations when WPFI was established to replace it. Willingness to relocate in Proximity to referral The program was restructured with the intent of becom- the geographic area of the doctors and hospitals ing self-sustaining and non-reliant on donor funds. WPFI NGO franchisor stopped receiving USAID funds in 2004. JSI however left a trust fund for the program. The interest on the trust fund continues to finance the lead franchisor, WPFI. Once in the network, midwives are also expected to meet minimum standards in order to remain in the network. Franchisees must be able to meet quality standards, pay BlueStar Pilipinas franchise fees, and comply with reporting requirements. Chronically underperforming franchisees are removed by BlueStar is a franchise brand developed and owned by the NGO from the network. Marie Stopes International (MSI), a UK-based non-profit agency. Population Services Pilipinas, Inc. (PSPI) is the national franchisor of BSP; it manages BlueStar brand- Financial arrangements ed clinics in the Philippines, and implements its own FP When a midwife agrees to join WFMC, she signs a five- outreach programs. year contract and pays a franchise fee of 100,000 PHP (2,247 USD). Franchisees also pay a quarterly royalty fee All franchisees are midwives that work exclusively in the of 30,000 PHP (674 USD). NGOs receive 90% of collect- private sector, and all are authorized, under the BlueStar ed fees, and put this and other revenue toward covering brand, to provide the following franchised services, along- operational expenses. WPFI receives 10% of the fees, and side any other non-franchised services already offered at 45, 46 also receives annual interest on a trust fund left by John the clinics: Snow International, Inc. (JSI) in the 1990s. • Family planning: family planning counseling, Midwives earn revenue from the direct sale of health contraceptives, and referrals for tubal ligations services to clients. Those that are accredited under the • Women’s reproductive health services: Pap smear and NHIP receive reimbursements from that program for the management of reproductive tract infections provision of services to enrolled beneficiaries. Lastly, many midwives earn revenue from the sale of sundry items or family planning commodities.

Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas | 10 Organizational structure Minimum requirements for franchisees PSPI is responsible for the oversight and expansion of The following criteria are used to determine eligibility of the program. The agency also provides franchisees with midwives for the BlueStar program: competency trainings, technical assistance, subsidized commodities and supplies, quality monitoring and Midwife selection Franchise contract assurance services, promotions and marketing, and criteria requirements branding support. Licensed by the Philippine Provide adequate space PSPI personnel known as field team members (FTMs) Regulatory Commission for clinic work directly with franchisees to generate local demand and registered with the for services through community activities (e.g., buntis Integrated Midwives Asso- parties, which are lively gatherings for pregnant women ciation of the Philippines or mothers), collect timely payments from franchisees, and ensure the delivery of family planning services. Aside No existing agreements or Timely payment to PSPI from regular visits to franchisee clinics, FTMs also conduct contracts with organiza- for equipment and supplies business system audits twice a year where they check the tions or agencies providing and technical assistance reported service numbers and stock records of the fran- similar assistance as PSPI chisees, and administer member and customer satisfac- Has an existing private Adherence to standard tion surveys. FTMs report all their activities and findings to practice operational procedures the BSP brand associate, who in turn works closely with and format PSPI senior management. FTMs are directly responsible for supporting franchisee midwives to become accredited Not employed in a Proactive promotion of under the NHIP. government or private contraceptives to clients health facility including referral for sterilization services No plans to work abroad Proper maintenance of BSP Organizational Structure47 clinic equipment Committed to provide Cannot join any other fran- family planning chise program or network PSPI Portfolio Project Officer Willingness to complete all Cover cost of clinic’s required trainings utilities Brand Associate Good reputation in the Submit weekly and community monthly data on revenue Field Team Members and delivered services

BSP Franchisees When a midwife agrees to become a franchisee, she undergoes trainings on BSP’s business systems module and a comprehensive competency-based clinical training Clients and Community on FP (that includes IUD didactics and practicum). After successful completion of training requirements, the franchisees’ facilities are renovated with PhilHealth accreditation standards in mind. They are also given the equipment they need to provide MNCH and reproductive and sexual health (RSH) services, as well as a six-month supply of essential commodities.

Franchisees may be removed from the program if they consistently fail to comply with the franchise agreement.

Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas | 11 Financial arrangements A brief profile When a franchisee first joins BSP, the initial package of In 2008, MSI and its senior partner in the Philippines, clinic equipment and supplies—amounting to approxi- PSPI, established BSP midwife clinics in order to increase mately 50,000 PHP—is subsidized by PSPI. Franchisees access to short and long-acting modern family planning pay back part of the cost of the equipment and supplies methods through the private sector. BSP later expanded through a monthly payment of 1,000 PHP (22 USD) for its remit to providing technical support for the provision of three years. An additional yearly membership fee of 1,500 maternal and newborn health services as a response to PHP (33 USD) is also paid by the franchisees to cover opportunities to link to the NHIP. costs associated with the technical assistance provided by PSPI. PSPI uses the revenue generated from these BSP operates on a fractional franchise model, where fees, as well grant money from MSI, to finance the opera- additional RSH services are added to the existing MNCH tional costs of BSP. services provided by midwives. BSP’s target population is women found in urban, peri-urban, and rural areas with Midwives earn revenue from the direct sale of health the capacity and willingness to pay for low cost MNCH services to clients. Those that are accredited under the and RSH services. NHIP receive reimbursements from that program from the provision of services to enrolled beneficiaries. Lastly, BSP is primarily financed by grants, which are channeled midwives earn revenue from the sale of FP commodities, through MSI. which PSPI provides to them at cost.

Introduction to Well-Family Midwife Clinics and Bluestar Pilipinas | 12 Findings

Strategies used to build and support links Advocacy at the national level with the NHIP In the mid-1990s, under renewed political commitment and with funding from donors, new initiatives to engage Linking franchisees with the NHIP has presented both midwives within a broader strategy to improve maternal WFMC and BSP with opportunities and challenges. health were launched. At that time, midwives were not yet Accreditation requirements for midwives and their clinics eligible to become accredited under the national health are complex and paper-work intensive, but PhilHealth insurance scheme. reimbursements can be substantial in comparison to typical OOP payments. Additionally, accreditation may WFMC, before it was known under that name, was a reduce cost burden on clients. significant actor in policy development on this issue. In developing its own business plan, it produced reports that Both franchise programs have therefore played a sub- become influential in setting standards for the Maternity stantive role as intermediaries and technical advisors for Care Package. A time and motion study it executed pro- franchisees that are in the process of first-time or re-ac- duced costing estimates that were subsequently directly creditation. In some instances, they have performed the adopted for the Maternity Care Package. WFMC was also required leg-work on their behalf. Many of these activities a participant in the Technical Working Group to determine are costly, requiring direct visits to clients, the provision the standards and contents of the MCP. of in-kind or financial support to meet infrastructure or equipment requirements, and the investment of personnel Since that time, the franchise programs continue to en- time to build expertise on policies relating to accreditation. gage in advocacy at the national level, namely in relation Where possible, these approaches have been built onto to influencing reimbursement rates and re/accreditation pre-existing franchise program activities. However, given standards for midwives. As one WFMC area franchisor the complexity and costs associated with meeting shifting notes, “In the past it was 6,000 (PHP) per delivery. Now accreditation requirements (see the appendix for more I think its 9,000. So, we’ve been assisting our midwives, on PhilHealth accreditation requirements), innovative new and we’ve been attending meetings with PhilHealth be- activities have been added to the menu of services offered cause they do research, and the WFMCs are part of where by each program. they get their respondents and their cases for deciding on certain policies—particularly on rates for PhilHealth accreditation.”

WFMC encourages Manila-based franchisee midwives to participate in PhilHealth meetings, and PhilHealth also pro-actively invites midwives to seek their opinions. This level of engagement was engendered by the long history of joint work, and by excellent relationships between the former WFMC leadership, local area franchisors, and policy-makers.

The role of effective early leadership in propelling the WFMC agenda forward was a theme that emerged in multiple conversations. One PhilHealth representative explained that relationships between Philhealth and the franchise were built early on, and “…we are really in close contact with these organizations, particularly with the preparation of the accreditation. And concerning the benefits, they are one of our stakeholders who mainly suggests This sign is used to display both the franchise brand and NHIP appropriate actions on how we could give out reasonable accreditation status of the clinic. benefits that would benefit the midwives and our members with regards to MCP… Once we get their feedback we take that into consideration in revising or developing other packages, or improving our accreditation process.”

Findings | 13 Access to capital and supplies Additionally, both franchise programs donated supplies and large equipment (e.g., delivery tables, autoclaves) Accreditation requires that the participating provider meet to franchisees. Donations were largely determined on a strict requirements set by the Department of Health in case-by-case basis, and in many instances were sub- terms of equipment and facilities. Meeting these require- stantial. Several of the franchisees that participated in this ments can pose a significant challenge to healthcare study noted that the contributions were transformative, providers, especially those that rent clinic space, or have enabling them to grow and sustain a profitable business. inadequate access to capital. To support the franchisees, both social franchise programs therefore began either directly disbursing grants or low-interest loans, or facilitated access to loans through local banks. Additionally, ad hoc small-scale loans were administered by franchise program personnel.

Initial financing for the loans and grants provided by the PSPI program came from the program’s general operating funds, derived from Marie Stopes International, and ultimately, from donors. It was anticipated that the interest and return payments from the franchisees would sustain this particular initiative. It has since halted due to the uncertainties of future funding, lower-than-anticipated return payments from loan and grant recipients, and more stringent facility requirements by the health insurance program. In the effort to mitigate the financial risks it assumes in supporting franchisees to get accredited, BSP has increased qualification requirements for midwives inter- ested in participating in the franchise; formerly, midwives that rented their facilities were allowed to participate. Now Patient education material and family planning supplies donated by a franchise program clinic ownership is required.

The Department of Health will impose stricter facility Meeting facility layout requirements requirements in 2015, and this presents a significant chal- To meet accreditation requirements, clear signage is re- lenge to both franchise programs in their work to support quired, as are clear divisions between the private consul- the remaining unaccredited midwives. tation or examination room, delivery room, patient’s room, and toilet. In many instances, the social franchise program There were also private bank loans available for the first creates the basic blueprint to guide the construction or recruits of WFMC. WFPI negotiated with a micro-lend- renovation of the clinic so that it meets the standards. ing bank, Opportunity Microfinance Bank, on behalf of They also play a role in supervising the actual construction the franchisees. This arrangement fell through, howev- of the facility. er, because the bank had only one office in Manila and franchisees in the provinces found the travel and costs to be burdensome. Respondents of this study noted that Technical assistance in understanding they were resistant to taking large institutional loans, and accreditation processes and requirements preferred to rely on personal or familial reserves. Very few The franchise programs demystify the accreditation midwives were reported to have availed of the loans. process to the franchisees, and become experts on PhilHealth in the process. Due to the strict nature of the facility and equipment requirements for accreditation to provide MCP and NCP PSPI administrators explained that the Field Team packages, the franchise programs’ entry and membership Members, under the supervision of the Brand Manager requirements and policies have came to mirror those of and the Portfolio Projects Officer, explain the requirements PhilHealth. As one BlueStar franchisee noted, “Without for PhilHealth accreditation to franchisees, assess the them I wouldn’t have a clinic. And if I did have a clinic, I franchisees’ existing infrastructure, identify gaps, and won’t have PhilHealth [accreditation] because there really advise on steps to increase the likelihood of accreditation. are so many requirements and they really did so much so They further noted that this sort of expertise was essential we could be PH accredited.”

Findings | 14 for the franchise program to play a meaningful role as an Renewal of accreditation intermediary, as requirements are complex and change Franchisees are required to renew their clinics’ PhilHealth periodically. accreditation every year. Franchise programs issue reminders to ensure this occurs in a timely fashion. The Additionally, they invite representatives from PhilHealth, franchisees then manage this process themselves, and the DOH and other technical experts to train franchisees largely credit the franchise programs with empowering on accreditation and licensing requirements. them to do this. They note that the programs offered the technical assistance and personalized support that Paperwork processing enabled them to understand and meet the paperwork requirements; and supported them to build the personal Franchise programs also assist franchisees in filling up wherewithal to interface with government institutions. and processing documents for PhilHealth accreditation. They assume simple tasks such as organizing, photocopy- ing, submitting, and notarizing documents for franchisees. Some staff members also accompany franchisees to local government offices when applying for required govern- Strategies used to build and support links ment-issued business permits, and to settle local accredi- with the NHIP tation-related disputes, as needed. • Advocacy at the national level Facilitating agreements with partner physicians • Access to capital and supplies Franchisees are required to sign a memorandum of • Meeting minimum clinic space and layout agreement (MOA) with two referral physicians (i.e., obste- requirements tricians/gynecologists and pediatricians) in the event of • Technical assistance in understanding complications, or for pediatric cases. As midwives are not accreditation processes and requirements allowed by their scope of practice to prescribe medica- • Paperwork processing tions, partner physicians are also needed for this purpose. • Facilitating agreements with partner physicians The franchise programs make themselves indispensable • Claims and reimbursements by researching and recommending eligible referral physicians. The programs also provide a template for the MOA • Reminders for renewal of accreditation and edit the document based on local specifications. In some cases, franchise program staff members accompany franchisees to the meetings where the documents are signed. Franchisee respondents noted that this form The substantial technical and other assistance offered by of support is critical, especially in instances where the in- the programs has paid off in terms of high rates of ac- tended physician is difficult to work with, or the franchisee creditation among franchisees. BSP however observes possesses insufficient knowledge of English to execute an that the remaining unaccredited franchisee clinics, which agreement. are by and large less well equipped and operate in rented facilities, may be the most difficult to support through the Claims and reimbursements process. They note that unless the clinics are relocated to areas with higher foot traffic, they will not earn enough to Once accredited, franchisees need to file claims at their finance their own upgrades. local PhilHealth office in order to be paid for services rendered. Reimbursements from Philhealth may, on occasion, WFMC’s membership has not grown in recent years, and take several months to arrive. Thus, Philhealth financing their support for accreditation of new franchisees has thus may be associated with delayed payments and substan- stalled. Substantial donor funds exited the program in tial business risk for franchisees. To mitigate the impact 2004, and in the absence of a revenue-generating of delayed payment, the BlueStar instituted the Paluwal business model, few efforts at network growth were made program. Under this program, a loan is advanced to the subsequently. franchisee until the time reimbursements are processed. This program, however, has since been stopped due to lack of timely re-payment and uncertain funding.

Findings | 15 Understanding the value proposition: Given the plethora of midwives in the market, brand name To the franchisee and the franchisor and prestige may be the factor that sets franchisees apart. Longstanding and new franchisees both noted that the Franchisors incentivize healthcare providers to become signage continues to offer reputation support. franchisees by convincing them that they will derive benefits from membership in the franchise network such as increased client volume, revenue, or reputation; or access to trainings, equipment or medical commodities. It is plau- sible that the substantial support offered to franchisees to become accredited may also be viewed as a benefit of participation, and may support franchisors to not only recruit additional members, but also retain them for the long term. Linkages with the national health insurance program may also offer additional advantages to the franchisors themselves, such as recognition and financing from the public sector.

We therefore originally sought to understand how the franchise programs’ support for accreditation affected their value proposition in the eyes of franchisees. We however found that franchisees did not differentiate between rou- The brightly colored BlueStar sign sits directly above the sign indicating tine support services provided by the franchise programs, that the midwife accepts Philhealth beneficiaries. Both are visible from and the additional support offered for accreditation. from a distance. Therefore, we describe below the benefits the franchisees report they derive from participation in the franchise program and the national health insurance program. We also 2. Networking, personal and professional support, explain how the franchisors think their efforts to support and empowerment accreditation of franchisees affects their value proposition, Midwives participating in the franchise networks and if this translates into financial returns for them. expressed an appreciation for the value of participation in a collegial franchise network. This is not surprising, given the long history and popularity of midwife networks in the The franchisee perspective: Philippines. They also expressed how important the Benefits of participating in the franchise and networks are as a tool for empowering franchisees. receiving accreditation support They described the franchise networks as a source of community, family, and camaraderie. 1. Branding and reputation Accredited franchisees prominently display franchise They further noted that the franchise networks have brand signage adjacent to, or together with, Philhealth empowered them to engage with government institutions, signage. The signs are bright yellow, and are posted in and to speak on their own behalf within the franchise prominent places, indicating the availability of branded programs themselves. In the case of WFMC, this activism health services that are financed by the NHIP. Franchi- is engendered by a governance structure that includes op- sees pointed out that the WFMC and BSP brands are well portunities for midwives to take an active role in determin- known and respected in their communities. They further ing the direction of the franchise program. noted that the franchise brands are associated with good quality services and products. As one midwife noted, This level of empowerment has translated into the ability “every time I go to gatherings and they hear that I am a to seek re-accreditation without significant support from BlueStar member, they know. ‘She’s a BlueStar member the franchise programs. Some franchisees noted they so her clinic looks like this and like that and these are the were empowered to the degree that they no longer need- services she provides...quality.’” ed hand-holding from the franchise program. However, they continued to stay on out of loyalty and affection for The reputation conveyed by the signage may be a key the program and its founders. incentive for the franchisees to sustain membership over the long term. As one midwife noted, “Actually I’m thinking about leaving the franchise, because this year I think we 3. Increase in and certainty of client load and revenue need to sign another franchise agreement. But then again, Compensation under Philhealth for the provision of MCP I want to…still the name. Because we are identified as the and NCP is considered ‘full cost,’ which means that WFMC.” all costs incurred by the midwife while providing these

Findings | 16 services are fully covered by the health insurance pay- by the DOH or PhilHealth, are expensive and difficult to ments. PhilHealth reimbursements for MCP and NCP can access on one’s own. As she points out, “When you’re reach up to 9,750 PHP (219 USD), excluding taxes and alone, your training will not be the same. You will need to other deductions. This amount tends to be considerably penetrate the other organizations to get the same training higher than OOP charges to clients for the provision of the and you need to pay.” same services. Both WFMC and BSP program administrators agree that Midwives also noted that Philhealth payments for the MCP the technical assistance they provide to franchisees and NCP are more reliable than OOP payments, as clients regarding PhilHealth accreditation is important in reinforc- who pay out-of-pocket may default or pay less than they ing the attractiveness of the franchise program to existing owe. They view this as a tremendous business advantage and prospective franchisees. As a PSPI representative of being accredited as a Philhealth provider. expressed, “Without the expertise that PSPI has in terms of PhilHealth accreditation processes, we wouldn’t be Payments by Philhealth for the provision of MCP and attractive to new midwives, and the current midwives NCP services have given rise to a phenomenon known wouldn’t value staying in the system.” as ‘millionaire midwives.’ These are midwives that have financially benefited from participation in the national Aside from PhilHealth-related support, franchise program health insurance program, and have, in many instances, personnel are also available for general technical support used this money to expand operations, hire other mid- and guidance, which franchisees value as well. Franchise wives, and bring family members into the profession. Both program staff members are approachable, even taking calls franchise programs include millionaire midwives, and the or answering text messages during non-business hours. members acknowledge the franchise programs made this level of financial success possible. Technical support provided by the franhise programs is partially reimbursed by franchisees, or may be covered As one midwife noted, “Because when you’re on your under salaries, cross-subsidized by general operating own, you think you can manage? No. There are a lot of budgets, or uncompensated altogether. These activities government [requirements] that you have to comply with. may however be tied to a substantial benefit to the It’s really different when you have an NGO that assists franchisor: increased program loyalty. you… When you’re part of the franchise, you have back up, there will be someone who will guide and support you.” The franchisor perspective: Benefits of offering technical support for Philhealth payments were therefore seen as a critical accreditation source of revenue for the midwives. Midwives also 1. Franchise loyalty and membership retention reported they felt more of an incentive to help enroll the Franchisees attributed their current level of professional, uninsured into Philhealth, as payments from Philhealth personal, and business success to the technical assis- were considerably more desirable than OOPs. tance and support they received from the franchise program, and their subsequent participation in PhilHealth. As The franchise programs have not yet used these success a result, some mentioned that they cannot imagine leaving stories to market themselves to prospective recruits, but the franchise network because they want to stay loyal to they see an opportunity. As noted by a franchise program their respective franchise programs. There is also a deep administrator when asked if his marketing strategy sense of personal debt (utang na loob) and gratitude currently includes any references to Philhealth, “Now. In (pasasalamat) among the franchisees. As one franchisee the beginning it wasn’t. In the beginning the vision was observed, “We also don’t want to detach from [the fran- just to establish the franchise, and to make them financial- chise] because we owe them everything and they’re the ly sustainable, but with the looming financial sustainability ones who gave us a better life, to be successful midwives, through social health insurance, certainly it’s a value to become respected in the community. I must be crazy if proposition to the midwives.” I think about leaving BlueStar. They helped you to be successful, to be respected, to have your own business, and 4. Ongoing access to trainings and technical support then you just leave them? I haven’t thought about being a The trainings and updates the midwives receive are a traitor to them.” key incentive for remaining in the franchise networks. One franchisee sees the trainings as a way to cultivate This sense of loyalty may balance out some of the costs innovation, which she thinks is necessary to succeed in a (to the franchisee) of participating in the network. As one competitive market. Another franchisee pointed out that franchisee noted, “It’s like you don’t have gratitude that the trainings and updates, some of which are required

Findings | 17 they gave you so much and then when the contract ends is about. They know what BlueStar represents. So it’s a you leave them. And they don’t demand a lot. You just brand itself. In the regional offices of PhilHealth, in the have to send your output through text every week. And central office, for that matter.” then someone comes here—the field manager—every quarter and they look at our records. That’s it! And still WFMC, with a longer historical presence in the country, you leave?” also explained that their early national-level policy work continues to give them credibility in the eyes of PhilHealth While loyalty may be seen as a rough approximation of and the DOH. As one WFMC area franchisor explained, franchisee satisfaction, it is not the only factor determining “There are so many conferences we are invited to. They membership retention. Franchise programs continually recognize [our NGO] and the WFMC as partners in health. strive to remain valuable to the franchisees by finding in- So we are part of the referral system. We are part of the novative ways to support them, and risk network attrition technical working group—on the upper levels.” if they are unable to demonstrate that value. Thus, while some respondents expressed loyalty, a sense of person- The franchisors note that the relationships they have al debt, and gratitude towards their franchise programs, cultivated with the DOH and Philhealth have benefited some franchisees also hinted at their misgivings and frus- midwives in tangible ways. They report playing a key role trations when faced with unsatisfactory program manage- in influencing decisions on compensation rates for the ment practices. MCP, and that they have been able to negotiate (on behalf of midwives) more lenient timelines to institute new DOH In the early 2000s, WFMC changed its organizational licensing requirements. As PSPI notes, “In the beginning, structure. They decentralized operations management we had engaged them (the DOH) in licensing. In fact, we from one Manila-based franchisor to several local area were instrumental in defining the size of the clinic area, the franchisors. The local area franchisors, each with their birthing area, to 50 square meters. In the beginning, they own unique histories as previously independent NGOs, were setting the requirement at 150 square meters. We implemented the franchise program variably. In some re- have a stake there, because none of our midwives would gions, this has meant a downscaling of technical support have met that requirement, except one or two.” services. This has prompted some midwives in the WFMC franchise to re-consider their membership in the network. As one midwife said, “there is a lot of competition out there. If the NGOs [local area franchisors] don’t take care of the midwives, what will happen? They will just do their The franchisee perspective: benefits of own practice. They will not follow the standards of our participating in the franchise program and foundation, our NGO, and the DOH. That’s why it [the receiving accreditation support decentralization of administration] really hurts me.” • Branding and reputation Franchise programs, having aligned membership require- • Networking and personal and professional ments with accreditation requirements, also front-load a support good deal of their support to midwives. Therefore a lot of • Increase in and certainty of client load and the value that midwives expect to get from participating revenue in the franchise network is realized early on. Some respondents observed that they were unsure if the franchise • Ongoing access to trainings and technical networks had anything left to offer them, and this would support influence their decisions about whether or not to renew The franchisor perspective: benefits of offering their franchise contracts. technical support for accreditation • Franchisee loyalty and member retention 2. Recognition among policy makers Because of their active regional engagement with Phil- • Recognition among policymakers Health and the DOH (on behalf of individual franchisees), BSP reports they are known by the agencies. As a PSPI representative explained “It has given us space within their minds. You talk about BlueStar, they know what BlueStar

Findings | 18 Lessons learned

Both programs have deftly capitalized on policy developments to link their programs with the NHIP. In some Questions to consider instances, they spurred those policy developments. In the process, both have empowered and enriched midwives,a 1. In its pursuit of sustainability, is enrichment built a reputation for quality healthcare, reduced OOP out- of franchisees an important goal of the social lays by clients, and expanded the range of health services franchise program? and commodities available at the clinics owned by fran- If so, this is important to articulate as a goal, as chisees. They have also earned the loyalty of midwives, it can inform how the social franchise program is their willingness to comply with standards and technical implemented, who it recruits, and the structure of its and facility requirements, and a place at the policy-mak- membership fee payments. ing table. There are important lessons to learn from their experiences. 2. Is it important for poorer midwives to be engaged constructively within the franchise 1. Alignment of franchise membership requirements network? with NHIP requirements raised the bar for entry for This will depend on the goals of the social fran- midwives. It increased the odds that franchisees would chise. If the goal is to raise the quality of services get successfully accredited; it may have also disincen- offered by local healthcare providers, this may be an tivized prospective franchisees from joining the franchise important consideration. Some franchise programs networks, due to prohibitive costs associated with com- have attempted to develop tiers of network provid- pliance. This double-edged sword can be wielded by ers, each with different franchise entry criteria and franchise programs to become significant players in the strategies for engagement. social health insurance sphere; it can also limit network membership to the middle-class or wealthy. Other groups are experimenting with different approaches to quality improvement and accreditation among healthcare providers with low access “You see, midwives before had very low set to capital. up standards—like area, layout of clinics Additional reading and so forth. There were a lot of midwives— • The World Health Partners model uses that when we standardized our procedures— a tiered approach to provider engagement: like clinic spaces, layout and everything to ananya.org.in/stories-and-lessons/332- comply with Philhealth standards—so, a upgrading-healthcare-from-informal-providers lot of them no longer wanted to continue • Read about PharmAccess Group’s approach to because of the cost involved. This happens quality improvement among healthcare providers when the clinic space is rented.” with low access to capital: pharmaccess.org – Franchisor

a. The majority of WFMC midwives have invested their own funds from overseas earnings into capital investments. BlueStar, which initially did not require midwives to own their clinics, now requires it. Both programs have shifted from a model that fa- vored greater financial risk-sharing into one that places the risk primarily on the midwives.

Lessons learned | 19 2. Plans for long-term financial viability of the Therefore, once substantial donor funds exited from programs were initially developed with the idea that WFMC, it was forced to revisit these earlier decisions and substantial donor funding would be available for the re-structure its model. Under the newer, less costly model, long term. This led to decisions that prioritized goals like management is de-centralized, and operating budgets are equitable use of healthcare services and franchisee profit- largely financed by the NGOs that took on management ability. For instance, both programs have invested sub- of each local network. This results in variable implementa- stantially in supporting their franchisees to upgrade and tion of the program’s standards. get accredited; both have recruited midwives in far-flung and remote regions with low business potential; and both BlueStar has had to scale back the types of support have created quality assurance and monitoring systems it offers midwives and raise the bar to entry. As it that are costly, but highly beneficial to the program. contemplates the exit of major donor funds in the coming However, revenue from membership and annual fees has years, the program is considering how best to balance its been insufficient to finance the work of the franchise pro- commitment to equity and its commitment to financial grams. Also, neither program has been able to translate their sustainability for the franchisee and itself. suport for NHIP accreditation into revenue for themselves.

“That’s a tricky situation right now. Unless we find another grant to support us through a certain period of time, then we will find it difficult to directly support the franchised midwives. So the only solution there is to find a sustainable solution of financing our activities for the franchise—with the revenue coming from the midwives themselves... It means that either we are able to leverage existing grants to create some commercial viability around the franchise, or without that, to restrict the franchise to members that can support the franchise. In other words, eliminate the drag.” – Franchisor

Questions to consider 3. If financial returns are likely to be unsatisfactory given the program’s focus on reaching the 1. Instead of using donor funds as a primary hard-to-reach or investing heavily in quality sup- source of revenue, how can these funds be port to franchisees, how can programs quantify invested strategically to build business models their value in terms of ‘public health returns’? with revenue-generating potential? The Social Franchising Metrics Working Group Discussions from the October 2014 Global Confer- recommends the use of five public health goal posts: ence on Social Franchising pointed the way to some a demonstration of cost-effectiveness, health impact, approaches to channeling donor funding strategically: quality, equity, and increased use. possibilities included the channeling of donor funds toward testing, experimentation and evaluation of Further demonstration of value in these areas may new approaches to financing and delivery of care; support franchise programs as they state their case also, donor money may be used as a catalyst for for continued investment by donors and others. leveraging public funds. Additional reading 2. How can programs leverage their linkages with social health insurance programs to • The conference report: sf4health.org support their operating costs? conferences/2014-conference Social franchise programs may need to consider • The Global Health Group investigated different how to make themselves indispensible in transactions strategies used by eight programs to maxi- between franchisees and the third party payor. For mize options for sustainability: sf4health.org/ instance, BlueStar is considering how to formalize research-evidence/reports-and-case-studies its role as an intermediary between franchisees and • Tools to measure performace for equity and health Philhealth. One option they are considering is to impact: sf4health.org/measuring-performance/ submit all claims on behalf of franchisees, and sub- metrics-working-group tract a small percentage from the reimbursements.

Lessons learned | 20 3. In the effort to ensure franchisees can get “It has given us pride, an image, a new way accredited, both programs have front-loaded a good of working with a new group of private mid- deal of their support to the clinics. This support has come in the form of clinical and business guidance, and wives who are not under our direct employ. access to equipment and capital, among other things. We are gaining experience. We are gaining Once provided with this support, members stay on out of expertise. There are challenges, and we are loyalty, and to retain access to technical updates, personal meeting them as they come. Certainly one and professional support, and the reputation signified by of the challenges is making money out of the signage. They report that their revenue has increased two to three-fold due to participation in the NHIP, but are the entire thing, making money for PSPI.” still hesitant to pay larger fees for access to ongoing –Franchisor services provided by the franchise programs.

Questions to consider 1. Can franchisees be incentivized to pay higher The franchise programs may need to align their pro- membership fees, fees based on a percentage of grams, or their technical support or training activities profits, or to pay for services rendered? with policies that would enable them to be financed by these public agencies. For instance, medical institu- Programs note that midwives resist changes in the fee tions that pass Philhealth-specified certifications can structure once it is imposed. As noted above, BlueStar qualify as training centers for midwives. These cen- is considering how to be remunerated automatically ters are paid by Philhealth for the provision of training from health insurance payouts to franchisees. Given services. Franchise programs will need to assess the complexity of claims processing and health insur- opportunities like these for how well they fit with the ance-related procedures, franchisees may increasingly program’s mission, and will need to remain flexible in be able to capitalize on their role as a navigator and order to embrace business opportunities like these. intermediary on behalf of individual midwives. Other programs have attempted to make themselves indis- Additionally, franchise programs need to be visible to pensable to franchisees’ ongoing business success policy-makers. Engagement at the local level, while by giving them access to profitable socially marketed highly effective for ensuring franchisees meet local commodities and retail goods, so long as they remain accreditation stipulations and create the right local within the network. partnerships, may be insufficient for raising the profile of social franchise programs and bringing them to the 2. Can the local health or social health insurance attention of the people that control national or regional agencies finance any of the work that is being health budgets. done by the franchise programs?

Lessons learned | 21 4. Both programs have placed an emphasis on build- need hand-holding from the program, and may not feel ing the capacity of franchisees to financially manage the need to renew membership in coming years. successful businesses, and to deliver high quality care. Thus, some franchisees report they may no longer

Question to consider 1. What are the pros and cons of ‘graduating’ answer. A few programs have opted to graduate successful midwives from the programs? successful franchisees; a few others have created different levels of franchise membership for franchisees Midwives that have exited a franchise network can no that no longer feel the need to engage as heavily with longer be quality-monitored, nor can they contribute the franchise network. to its revenues or the service statistics reported by the franchise program. ‘Scale’ is an important concept When assessed from a local health systems perspec- within social franchising. It is thought to lead to greater tive, some programs may find that their former revenue potential with incrementally less investments; franchisees are contributing to sustainable changes it is also the metric by which donors and policy-makers in the performance of the system, and that continued may judge the programs. participation in the network is not needed. This is however a very difficult metric to gauge success by. When and if to release franchisees from the network is a question faced by many programs. There is no simple

Lessons learned | 22 Conclusion

The Philippines has a huge reserve of midwives, and they • Where the capital and technical know-how for accred- are eligible to be compensated for the provision of ser- itation of private sector healthcare providers is absent, vices to Philhealth beneficiaries. The country is also rapidly programs can play the role of facilitator—either on expanding its national health insurance program to cover behalf of the public health system or the healthcare the entire population. Franchise programs have reacted workers. In the process, they can build the value prop- to these opportunities to produce programs that have the osition of the program. potential to support the achievement of Millennium Devel- Linking providers with the NHIP has proven to be a costly opment Goal 5, a priority of the current Health Secretary. endeavor on the part of franchise programs, and they have been unable to translate this service into a stream of While few other countries can boast of the convergence revenue. Both have been forced to make critical decisions of so many factors that could support the growth and regarding whether and how to continue this form of sup- financing of social franchising programs, the lessons from port to franchisees. On the same token, both have also this country can inform work in others. transformed the lives of midwives, reduced the crushing burden of OOPs on clients, and improved the quality of • Where social health insurance policies are under health services they receive. Additional studies on the development, programs can execute the studies and contributions of these interventions toward strengthening supply the voices that can inform those policies. the health system would be well worth it.b • When a window of opportunity opens up in national or regional social health insurance policies, programs can react swiftly to leverage those opportunities.

We’d like to offer a sincere thanks to the managers at b. Katy Backes Kozhimannil and colleagues conducted an WFMC and BlueStar for granting us access to their assessment of WFMC’s effects on pre-natal service utilization. franchisees, and supplying us with important information Reference: Kozhimannil K.B., Valera M.R., Adams A.S., regarding their programs. They have been gracious hosts, Ross-Degnan D. The Population-Level Impacts Of A National Health Insurance Program And Franchise Midwife Clinics On and have offered thoughtful reflections on the challenges Achievement Of Prenatal And Delivery Care Standards In The and successes they have encountered along the way. Philippines. Health Policy 2009; 92(1): 55–64. Also, a thanks to the midwives and staff from Philhealth and the DOH that took time out of their schedules to answer our questions. Lastly, a thank you to the topic experts that made themselves available (even when they were on vacation) to us. To suggest future thematic case studies, contact [email protected].

Conclusion | 23 References

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References | 24 34. Lavado RF, Lagrada LP. Are there regional variations in the 47. Pernito VL, Deiparine RC, Francisco FJT, Eldridge C. Clinical utilization of maternal and child care services across income social franchising case study series: BlueStar Pilipinas, Marie groups? Phil J Dev 2008; 35(2): 1–53. Stopes International. 2010; Available at: http://www.sf4health. 35. de Brantes F, Camillus JA. Evidence-informed case rates: a new org/sites/www.sf4health.org/files/resources/CaseStudy health care payment model. Fund Report 2007; 47: 1–20. PhilippinesFinal.pdf. Accessed October 31, 2013. 36. PhilHealth. Case rates—frequently asked questions. 2012; 48. Lonnroth K, Aung T, Maung W, Kluge H, Uplekar M. Social Available at: http://www.philhealth.gov.ph/members/special_ franchising of TB care through private GPs in Myanmar: an package/case_rates_faqs.html. Accessed May 1, 2014. assessment of treatment results, access, equity and financial protection. Health Policy Plan 2007; 22(3): 156–66. 37. PhilHealth. New PhilHealth case rates for selected medical cases and surgical procedures and the no balance billing policy. 49. Frost N. Social franchising of sexual and reproductive health PhilHealth Circular 2011; 11: I–XI. services in Honduras and Nicaragua. 2006; Available at: http:// www.mariestopes.org.uk/documents/Social%20franchising%20 38. PhilHealth. Newborn care package. 2012; Available at: in%20Nicaragua%20&%20Honduras%20-%20viewpoint%20 http://www.philhealth.gov.ph/members/special_package/ncp_ -%20%20English.pdf. Accessed June 8, 2014. benefits.htm. Accessed November 30, 2013. 50. PhilHealth. Institutional providers accreditation process. 2012; 39. PhilHealth. PhilHealth newborn care package (NCP). PhilHealth Available at: http://www.philhealth.gov.ph/partners/providers/ Circular 2006; 34: 1. institutional/process.html. Accessed May 1, 2014. 40. PhilHealth. Expanded normal spontaneous delivery (NSD) 51. Mays GP. Can accreditation work in public health? Lessons from package and maternity care package (MCP). PhilHealth Circular other service industries. 2004; Available at: http://www.cdc.gov/ 2009; 39: A–E. nceh/ehs/ephli/resources/can_accreditation_work_in_public_ 41. PhilHealth. Clarification on PhilHealth’s newborn care package health.pdf. Accessed May 1, 2014. and normal spontaneous delivery and maternity care package. 52. Quimbo S, Florentino J, Peabody JW, Shimkhada R, Panelo C, PhilHealth Circular 2009; 7: A–C. Solon O. Underutilization of social insurance among the poor: 42. PhilHealth. Amendment to PhilHealth circular no. 34 s. 2006 evidence from the Philippines. PLoS One 2008; 3(10): e3379. PhilHealth newborn care package (NCP). PhilHealth Circular 53. Kozhimannil KB, Valera MR, Adams AS, Ross-Degnan D. The 2007; 20: A–C. population-level impacts of a national health insurance program 43. Jones JB, Moore RV. Social franchising health services: a and franchise midwife clinics on achievement of prenatal and Philippines case study and review of experience. 2003; Available delivery care standards in the Philippines. Health Policy 2009; at: http://www.jsi.com/JSIInternet/Inc/Common/_download_ 92(1): 55–64. pub. cfm?id=4295&lid=3. Accessed November 29, 2013. 54. PhilHealth. Guidelines for accreditation of out-patient clinics, 44. JSI Research and Training Institute. TANGO II final report and physicians and midwvies for low risk maternity care package. project summary. PD-ACF 2004; 212: 1–73. PhilHealth Circular 2001; 15: A–D. 45. Viswanathan R, Schatzkin E. Clinical social franchising compen- 55. PhilHealth. Amendment to PhilHealth circular no. 15 s. 2001 dium: an annual survey of programs: findings from 2012. 2013; (guidelines for accreditation of providers for the maternity and Available at: http://www.sf4health.org/sites/www.sf4health. newborn care package). PhilHealth Circular 2009; 30: A–B. org/files/Social-Franchising-Compendium-2013.pdf. Accessed October 31, 2013. 46. Schlein K, Drasser K, Montagu D. Clinical social franchising compendium: an annual survey of programs, 2011. 2011; Available at: http://www.sf4health.org/sites/www.sf4health. org/files/Social-Franchising-Compendium-2011.pdf. Accessed October 31, 2013.

References | 25 Appendix: PhilHealth accreditation

In order to receive PhilHealth reimbursements for health- Initial accreditation or reaccreditation care services and products rendered, medical professionals including physicians, dentists, and midwives and their 1. Accomplished PhilHealth application form clinics need to be accredited by PhilHealth. PhilHealth 2. Notarized Warranties of Accreditation accreditation is a voluntary process wherein “the qualifica- 3. Photo of applicant tions and capabilities of health care providers are verified in accordance with the guidelines, standards and proce- 4. Photocopy of midwife professional license dures set by the [Philippine Health Insurance or PhilHealth] 5. Proof of payment of required PhilHealth premium Corporation.”50 contribution 6. Accreditation fee (500 PHP or 11 USD) According to PhilHealth, accreditation serves two purposes, namely (1) it allows health care professionals to participate 7. Photocopy of tax identification card in the NHIP and (2) it assures that the healthcare services 8. Certificate of good standing from one of two provided by health professionals are “of the desired and professional organization of midwives in the expected quality.”50 While accreditation has been associ- Philippines (i.e., Integrated Midwives Association of ated with improved service quality and standardization of the Philippines and Philippine League of Government services in other industries, these outcomes have yet to and Private Midwives) be documented in Philippine healthcare.51 A 2008 mod- 9. Evidence of competency on the expanded eling study found that PhilHealth accreditation of public functions of midwives (not required for graduates and private providers influences quality of care, but it from school year 1995 and onwards) alone does not promote high quality care.52 An analysis of trend data from the NDHS showed that the expansion 10. Memorandum of agreement with any of the of PhilHealth accreditation was associated with increas- following as referral for complicated obstetric and es in achievement of minimal standards for prenatal care pediatric cases: among women in the Philippines.53 a. Accredited partner physicians (obstetricians and pediatricians) There are two types of PhilHealth accreditation—one for professional providers and another for health facilities (also b. Interlocal health zone which allows sharing of called institutional providers). Each type of accreditation human resource has its own processes, requirements, and deadlines/time- c. DOH-certified basic or comprehensive emergency lines. Both types of accreditation are required in order for obstetric and newborn care network private sector midwives to receive PhilHealth reimbursements for the MCP and NCP. Renewal of accreditation

Professional accreditation refers to the accreditation of 1. Certificate of good standing from one of two pro- healthcare professionals such as physicians (general fessional organization of midwives in the Philippines practitioners and medical specialists), dentists, and mid- 2. Memorandum of agreement with any of the wives.54, 55 In 2011, PhilHealth accredited 10,773 general following: practitioners, 12,701 medical specialists, 201 dentists, a. Accredited partner physicians and 522 midwives.24 The following requirements are for the professional accreditation of midwives. b. Interlocal health zone c. DOH-certified basic and comprehensive emergency obstetric and newborn care network

Institutional accreditation refers to the accreditation of healthcare facilities such as hospitals, ambulatory surgical clinics, freestanding clinics, rural health units and health centers, maternity care clinics, and TB DOTS clinics.53, 54 The following requirements are for the institutional accreditation of maternity care clinics that wish to receive MCP and NCP reimbursements.

Appendix: PhilHealth accreditation | 26 Service capabilities blood pressure meter, and stethoscope), and storage containers (e.g., covered containers for cotton and (list of services that accredited clinics must be equipped receptacles for used cotton balls and gauze) to provide) 3. Standard Supplies—essential medical supplies (e.g., 1. Prenatal care IV set, IV tubing, disposable syringes, absorbable suture with needle, cotton balls, gauze, surgical caps 2. Normal birth and mask, cone mask for baby, and thermometer), an- 3. Newborn care including newborn screening tiseptic supplies (e.g., isopropyl alcohol), and essential 4. Health education (provision of materials and posters drugs and vaccines (e.g., tetanus toxoid, Vitamin K, related to MNCH, natural and artificial family planning erythromycin, and xylocaine/liddocaine) methods, and breastfeeding) 4. Records Management—admissions registry with 5. Postpartum care monthly summary, patient clinical records, and referral forms 5. Available Transport Vehicle—may be facility-owned Technical standards or contracted out (refers to the space and infrastructure requirements, 6. Human Resource—at least one PhilHealth accredited supplies, tools, instruments, and equipment that the clinic professional provider, full-time or on-call clinic aide, must have) on-call partner physicians or professional provider, and all personnel must be PhilHealth members with updat- 1. General Infrastructure—facility signage, lighting ed premium contributions and water supply, and adequate space and divisions 7. Quality Assurance Activities—list of quality assur- among consultation/examination room, delivery room, ance and improvement activities for initial and renewal patient rooms, and bathroom of accreditation (e.g., administration of satisfaction 2. Basic Consultation and Delivery Room surveys to patients and staff, submission of annual Equipment—essential delivery room equipment (e.g., morbidity and mortality data, report on referrals made, delivery table, Kelly pad, weighing scales, and oxygen compliance to monitoring and evaluation activities of tank), tools (e.g., suction apparatus, bag valve masks, PhilHealth, etc.)

Appendix: PhilHealth accreditation | 27 The Global Health Group

The Global Health Group (GHG) at the University of California, San Francisco (UCSF) is an “action tank” dedicated to translating major new paradigms and approaches into large-scale action to positively impact the lives of millions of people. Led by Sir Richard Feachem, the founding and former executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, the GHG works across the spectrum—from analysis, through policy formulation and consensus building, to comprehensive implementation of programs in collaborating low- and middle-income countries.

The GHG studies a variety of innovative delivery platforms that leverage the strengths of the private sector to achieve public health goals.

More information about this case study and social franchising in general can be found at SF4Health.org.

globalhealthsciences.ucsf.edu/ global-health-group